Is Mario Draghi - the new sheriff in town?
The strong statement by the ECB President-Mario Draghi has placed him to our opinion, "as the new sheriff in town!" The Tug of war between European government policy makers has been dragging on for quite sometime with the unresolved crisis between the other neighboring countries in Europe has had a nibbling effect on the global economy. But for now those statements made have given some relief for the Euro in managing to gain some ground from its initial low price of 1.2041, as compared to the 1.1875 dated last June of 2010 and in November of 2005 were it touched a low at 1.1640. Which we believe that the ECB would not allow such price levels to go any further.
Although, a weak Euro is as constructive as it can get for manufacturing sector, which is extremely good for Germany and France, as well as Italy for that matter. Especially in these critical times where exports are encouraged to spur-up growth for Italy. Nonetheless, Draghi's have caught a lot of traders and investors by surprise and is subsequently being challenge to show what he really has in store. Meaning, what else would he do with the up coming meetings by both the ECB and the Fed this week.
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